The move will help fund the development of the Catcher and Kraken projects in the North Sea.

Chief executive Simon Thomson said the agreement marked a “key milestone” for the company.

“The cash flow from these fields will underpin delivery of future exploration programmes with appropriate capital allocation within a balanced portfolio,” said Thomson ahead of the company’s AGM today.

The Catcher development plan is awaiting UK Government approval with first oil targeted by mid 2017.

The Kraken development is progressing on schedule with first oil expected by late 2016 or 2017.

By the end of 2017, Cairn said it expects to have spent about $1bn on its development assets, funded by existing cash resources and debt.